President Donald Trump promised that a wave of emergency tariffs on nearly every nation would restore “fair” trade and jump-start the economy. Eight months later, half of U.S. imports are avoiding those tariffs. “To all of the foreign presidents, prime ministers, kings, queens, ambassadors, and everyone else who will soon be calling to ask for exemptions from these tariffs,” Trump said in April when he rolled out global tariffs based on the United States’ trade deficits with other countries, “I say, terminate your own tariffs, drop your barriers, don’t manipulate your currencies.” But in the time since the president gave that Rose Garden speech announcing the highest tariffs in a century, enormous holes have appeared. Carveouts for specific products, trade deals with major allies and conflicting import duties have let more than half of all imports escape his sweeping emergency tariffs. Some $1.6 trillion in annual imports are subject to the tariffs, while at least $1.7 trillion are excluded, either because they are duty-free or subject to another tariff, according to a POLITICO analysis based on last year’s import data. The exemptions on thousands of goods could undercut Trump’s effort to protect American manufacturing, shrink the trade deficit and raise new revenue to fund his domestic agenda. In September, the White House exempted hundreds of goods, including critical minerals and industrial materials, totaling nearly $280 billion worth of annual imports. Then in November, the administration exempted $252 billion worth of mostly agricultural imports like beef, coffee and bananas, some of which are not widely produced in the U.S. — just after cost-of-living issues became a major talking point out of Democratic electoral victories — on top of the hundreds of other carveouts. “The administration, for most of this year, spent a lot of time saying tariffs are a way to offload taxes onto foreigners,” said Ed Gresser, a former assistant U.S. trade representative under Democratic and Republican administrations, including Trump’s first term, who now works at the Progressive Policy Institute, a D.C.-based think tank. “I think that becomes very hard to continue arguing when you then say, ‘But we are going to get rid of tariffs on coffee and beef, and that will bring prices down.’ … It’s a big retreat in principle.” The Trump administration has argued that higher tariffs would rebalance the United States’ trade deficits with many of its major trading partners, which Trump blames for the “hollowing out” of U.S. manufacturing in what he evoked as a “national emergency.” Before the Supreme Court, the administration is defending the president’s use of the 1977 International Emergency Economic Powers Act to enact the tariffs, and Trump has said that a potential court-ordered end to the emergency tariffs would be “country-threatening.” In an interview with POLITICO on Monday, Trump said he was open to adding even more exemptions to tariffs. He downplayed the existing carveouts as “very small” and “not a big deal,” and said he plans to pair them with tariff increases elsewhere. Responding to POLITICO’s analysis, White House spokesperson Kush Desai said, “The Trump administration is implementing a nuanced and nimble tariff agenda to address our historic trade deficit and safeguard our national security. This agenda has already resulted in trillions in investments to make and hire in America along with over a dozen trade deals with some of America’s most important trade partners.” To date, the majority of exemptions to the “reciprocal” tariffs — the minimum 10 percent levies on most countries — have been for reasons other than new trade deals, according to POLITICO’s analysis. The White House also pushed back against the notion that November’s cuts were made in an effort to reduce food prices, saying that the exemptions were first outlined in the September order. The U.S. granted subsequent blanket exemptions, regardless of the status of countries’ trade negotiations with the Trump administration, after announcing several trade deals. Following the exemptions on agricultural tariffs, Trump announced on Monday a $12 billion relief aid package for farmers hurt by tariffs and rising production costs. The money will come from an Agriculture Department fund, though the president said it was paid for by revenue from tariffs (by law, Congress would need to approve spending the money that tariffs bring in). In addition to the exemptions from Trump’s reciprocal tariffs, more than $300 billion of imports are also exempted as part of trade deals the administration has negotiated in recent months, including with the European Union, the United Kingdom, Japan and more recently, Malaysia, Cambodia and Brazil. The deal with Brazil removed a range of products from a cumulative tariff of 50 percent, making two-thirds of imports from the country free from emergency tariffs. For Canadian and Mexican goods, Trump imposed tariffs under a separate emergency justification over fentanyl trafficking and undocumented migrants. But about half of imports from Mexico and nearly 40 percent of those from Canada will not face tariffs because of the U.S.-Mexico-Canada free trade agreement that Trump negotiated in his first term. Last year, importers claimed USMCA exemptions on $405 billion in goods; that value is expected to increase, given that the two countries are facing high tariffs for the first time in several years. The Trump administration has also exempted several products — including autos, steel and aluminum — from the emergency reciprocal tariffs because they already face duties under Section 232 of the U.S. Trade Expansion Act of 1962. The imports covered by those tariffs could total up to $900 billion annually, some of which may also be exempt under USMCA. The White House is considering using the law to justify further tariffs on pharmaceuticals, semiconductors and several other industries. For now, the emergency tariffs remain in place as the Supreme Court weighs whether Trump exceeded his authority in imposing them. In May, the U.S. Court of International Trade ruled that Trump’s use of emergency authority was unlawful — a decision the U.S. Court of Appeals upheld in August. During oral arguments on Nov. 5, several Supreme Court justices expressed skepticism that the emergency statute authorizes a president to levy tariffs, a power constitutionally assigned to Congress. As the rates of tariffs and their subsequent exemptions are quickly added and amended, businesses are struggling to keep pace, said Sabine Altendorf, an economist with the Food and Agriculture Organization of the United Nations. “When there’s uncertainty and rapid changes, it makes operations very difficult,” Altendorf said. “Especially for agricultural products where growing times and planting times are involved, it’s very important for market actors to be able to plan ahead.” ABOUT THE DATA Trump’s trade policy is not a straightforward, one-size-fits-all approach, despite the blanket tariffs on most countries of the world. POLITICO used 2024 import data to estimate the value of goods subject to each tariff, accounting for the stacking rules outlined below. Under Trump’s current system, some tariffs can “stack” — meaning a product can face more than one tariff if multiple trade actions apply to it. Section 232 tariffs cover automobiles, automobile parts, products made of steel and aluminum, copper and lumber — and are applied in that order of priority. Section 232 tariffs as a whole then take priority over other emergency tariffs. We applied this stacking priority order to all imports to ensure no double-counting. To calculate the total exclusions, we did not count the value of products containing steel, aluminum and copper, since the tariff would apply only to the known portion of the import’s metal contentand not the total import value of all products containing them. This makes the $1.7 trillion in exclusions a minimum estimate. Goods from Canada and Mexico imported under USMCA face no tariffs. Some of these products fall under a Section 232 category and may be charged applicable tariffs for the non-USMCA portion of the import. To claim exemptions under USMCA, importers must indicate the percentage of the product made or assembled in Canada or Mexico. Because detailed commodity-level data on which imports qualify for USMCA is not available, POLITICO’s analysis estimated the amount that would be excluded from tariffs on Mexican and Canadian imports by applying each country’s USMCA-exempt share to its non-Section 232 import value. For instance, 38 percent of Canada’s total imports qualified for USMCA. The non-Section 232 imports from Canada totaled around $320 billion, so we used only $121 billion towards our calculation of total goods excluded from Trump’s emergency tariffs. Exemptions from trade deals included those with the European Union, the United Kingdom, Japan, Brazil, Cambodia and Malaysia. They do not include “frameworks” for agreements announced by the administration. Exemptions were calculated in chronological order of when the deals were announced. Imports already exempted in previous orders were not counted again, even if they appeared on subsequent exemption lists.

The Radio Spectrum Policy Group’s (RSPG) Nov. 12 opinion on the upper 6-GHz band is framed as a long-term strategic vision for Europe’s digital future. But its practical effect is far less ambitious: it grants mobile operators a cost-free reservation of one of Europe’s most valuable spectrum resources, without deployment obligations, market evidence or a realistic plan for implementation. > At a moment when Europe is struggling to accelerate the deployment of digital > infrastructure and close the gap with global competitors, this decision > amounts to a strategic pause dressed up as policy foresight. The opinion even invites the mobile industry to develop products for the upper 6-GHz band, when policy should be guided by actual market demand and product deployment, not the other way around. At a moment when Europe is struggling to accelerate the deployment of digital infrastructure and close the gap with global competitors, this decision amounts to a strategic pause dressed up as policy foresight. The cost of inaction is real. Around the world, advanced 6-GHz Wi-Fi is already delivering high-capacity, low-latency connectivity. The United States, Canada, South Korea and others have opened the 6-GHz band for telemedicine, automated manufacturing, immersive education, robotics and a multitude of other high-performance Wi-Fi connectivity use cases. These are not experimental concepts; they are operational deployments generating tangible socioeconomic value. Holding the upper 6- GHz band in reserve delays these benefits at a time when Europe is seeking to strengthen competitiveness, digital inclusion, and digital sovereignty. The opinion introduces another challenge by calling for “flexibility” for member states. In practice, this means regulatory fragmentation across 27 markets, reopening the door to divergent national spectrum policies — precisely the outcome Europe has spent two decades trying to avert with the Digital Single Market. > Without a credible roadmap, reserving the band for hypothetical cellular > networks only exacerbates policy uncertainty without delivering progress. Equally significant is what the opinion does not address. The upper 6-GHz band is already home to ‘incumbents’: fixed links and satellite services that support public safety, government operations and industrial connectivity. Any meaningful mobile deployment would require refarming these incumbents — a technically complex, politically sensitive and financially burdensome process. To date, no member state has proposed a viable plan for how such relocation would proceed, how much it would cost or who would pay. Without a credible roadmap, reserving the band for hypothetical cellular networks only exacerbates policy uncertainty without delivering progress. There is, however, a pragmatic alternative. The European Commission and the member states committed to advancing Europe’s connectivity can allow controlled Wi-Fi access to the upper 6-GHz band now — bringing immediate benefits for citizens and enterprises — while establishing clear, evidence-based criteria for any future cellular deployments. Those criteria should include demonstrated commercial viability, validated coexistence with incumbents, and fully funded relocation plans where necessary. This approach preserves long-term policy flexibility for member states and mobile operators, while ensuring that spectrum delivers measurable value today rather than being held indefinitely in reserve. > Spectrum is not an abstract asset. RSPG itself calls it a scarce resource that > must be used efficiently, but this opinion falls short of that principle. Spectrum is not an abstract asset. RSPG itself calls it a scarce resource that must be used efficiently, but this opinion falls short of that principle. Spectrum underpins Europe’s competitiveness, connectivity, and digital innovation. But its value is unlocked through use, not by shelving it in anticipation that hypothetical future markets might someday justify withholding action now. To remain competitive in the next decade, Europe needs a 6-GHz policy grounded in evidence, aligned with the single market, and focused on real-world impact. The upper 6-GHz band should be a driver of European innovation, not the latest casualty of strategic hesitation. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Wi-Fi Alliance * The ultimate controlling entity is Wi-Fi Alliance More information here.

Iris Ferguson is a global adviser to Loom and a former U.S. deputy assistant secretary of defense for Arctic and global resilience. Ann Mettler is a distinguished visiting fellow at Columbia University’s Center on Global Energy Policy and a former director general of the European Commission. After much pressure, European leaders delayed a decision this week amid division on whether to tighten market access through a “Made in Europe” mandate and redouble efforts to reduce the bloc’s strategic dependencies — particularly on China. This decision may appear technocratic, but the hold-up signals its importance and reflects a larger strategic reality shared across the Atlantic. Security, industry and energy have all fused into a single race to control the systems that power modern economies and militaries. And increasingly, success will hinge on whether the U.S. and Europe can confront this reality together, starting with the one domain that’s shaping every other: energy. While traditional defense spending still grabs headlines, today’s battlefield is being reshaped just as profoundly by energy flows and critical inputs. Advanced batteries for drones, portable power for forward-deployed units and mineral supply chains for next-generation platforms — these all point to the simple truth that technological and operational superiority increasingly depends on who controls the next generation of energy systems. But as Europe and the U.S. look to maintain their edge, they must rethink not just how they produce and move energy, but how to secure the industrial base behind it. Energy sovereignty now sits at the center of our shared security, and in a world where adversaries can weaponize supply chains just as easily as airspace or sea lanes, the future will belong to those who build energy systems that are resilient and interoperable by design. The Pentagon already understands this. It has tested distributed power to shorten vulnerable fuel lines in war games across the Indo-Pacific; it has watched closely how mobile generation units keep the grid alive under Russian attack in Ukraine; and it is exploring ways to deliver energy without relying on exposed logistics via new research on solar power beaming. Each of these cases clearly demonstrates that strategic endurance now depends on energy agility and security. But currently, many of these systems depend on materials and manufacturing chains that are dominated by a strategic rival: From batteries and magnets to rare earth processing, China controls our critical inputs. This isn’t just an economic liability, it’s a national security vulnerability for both Europe and the U.S. We’re essentially building the infrastructure of the future with components that could be withheld, surveilled or compromised. That risk isn’t theoretical. China’s recent export controls on key minerals are already disrupting defense and energy manufacturers — a sharp reminder of how supply chain leverage can be a form of coercion, and of our reliance on a fragile ecosystem for the very technologies meant to make us more independent. So, how do we modernize our energy systems without deepening these unnecessary dependencies and build trusted interdependence among allies instead? The solution starts with a shift in mindset that must then translate into decisive policy action. Simply put, as a matter of urgency, energy and tech resilience must be treated as shared infrastructure, cutting across agencies, sectors and alliances. Defense procurement can be a catalyst here. For example, investing in dual-use technologies like advanced batteries, hardened micro-grids and distributed generation would serve both military needs and broader resilience. These aren’t just “green” tools — they’re strategic assets that improve mission effectiveness, while also insulating us from coercion. And done right, such investment can strengthen defense, accelerate innovation and also help drive down costs. Next, we need to build new coalitions for critical minerals, batteries, trusted manufacturing and cyber-secure infrastructure. Just as NATO was built for collective defense, we now need economic and technological alliances that ensure shared strategic autonomy. Both the upcoming White House initiative to strengthen the supply chain for artificial intelligence technology and the recently announced RESourceEU initiative to secure raw materials illustrate how partners are already beginning to rewire systems for resilience. Germany gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. | Tan Kexing/Getty Images Finally, we must also address existing dependencies strategically and head-on. This means rethinking how and where we source key materials, including building out domestic and allied capacity in areas long neglected. Germany recently gave the bloc one such example by moving to reduce its reliance on Chinese-made wind components in favor of European suppliers. Moving forward, measures like this need EU-wide adoption. By contrast, in the U.S., strong bipartisan support for reducing reliance on China sits alongside proposals to halt domestic battery and renewable incentives, undercutting the very industries that enhance resilience and competitiveness. This is the crux of the matter. Ultimately, if Europe and the U.S. move in parallel rather than together, none of these efforts will succeed — and both will be strategically weaker as a result. The EU’s High Representative for Foreign Affairs and Security Policy Kaja Kallas recently warned that we must “act united” or risk being affected by Beijing’s actions — and she’s right. With a laser focus on interoperability and cost sharing, we could build systems that operate together in a shared market of close to 800 million people. The real challenge isn’t technological, it’s organizational. Whether it be Bretton Woods, NATO or the Marshall Plan, the West has strategically built together before, anchoring economic resilience with national defense. The difference today is that the lines between economic security, energy access and defense capability are fully blurred. Sustainable, agile energy is now part of deterrence, and long-term security depends on whether the U.S. and Europe can build energy systems that reinforce and secure one another. This is a generational opportunity for transatlantic alignment; a mutually reinforcing way to safeguard economic interests in the face of systemic competition. And to lead in this new era, we must design for it — together and intentionally. Or we risk forfeiting the very advantages our alliance was built to protect.

After more than three decades in the pharmaceutical industry, I know one thing: science transforms lives, but policy determines whether innovation thrives or stalls. That reality shapes outcomes for patients — and for Europe’s competitiveness. Today, Europeans stand at a defining moment. The choices we make now will determine whether Europe remains a global leader in life sciences or we watch that leadership slip away. It’s worth reminding ourselves of the true value of Europe’s life sciences industry and the power we have as a united bloc to protect it as a European good. Europe has an illustrious track record in medical discovery, from the first antibiotics to the discovery of DNA and today’s advanced biologics. Still today, our region remains an engine of medical breakthroughs, powered by an extraordinary ecosystem of innovators in the form of start-ups, small and medium-sized enterprises, academic labs, and university hospitals. This strength benefits patients through access to clinical trials and cutting-edge treatments. It also makes life sciences a strategic pillar of Europe’s economy. The economic stakes Life sciences is not just another industry for Europe. It’s a growth engine, a source of resilience and a driver of scientific sovereignty. The EU is already home to some of the world’s most talented scientists, thriving academic institutions and research clusters, and a social model built on universal access to healthcare. These assets are powerful, yet they only translate into future success if supported by a legislative environment that rewards innovation. > Life sciences is not just another industry for Europe. It’s a growth engine, a > source of resilience and a driver of scientific sovereignty. This is also an industry that supports 2.3 million jobs and contributes over €200 billion to the EU economy each year — more than any other sector. EU pharmaceutical research and development spending grew from €27.8 billion in 2010 to €46.2 billion in 2022, an average annual increase of 4.4 percent. A success story, yes — but one under pressure. While Europe debates, others act Over the past two decades, Europe has lost a quarter of its share of global investment to other regions. This year — for the first time — China overtook both the United States and Europe in the number of new molecules discovered. China has doubled its share of industry sponsored clinical trials, while Europe’s share has halved, leaving 60,000 European patients without the opportunity to participate in trials of the next generation of treatments. Why does this matter? Because every clinical trial site that moves elsewhere means a patient in Europe waits longer for the next treatment — and an ecosystem slowly loses competitiveness. Policy determines whether innovation can take root. The United States and Asia are streamlining regulation, accelerating approvals and attracting capital at unprecedented scale. While Europe debates these matters, others act. A world moving faster And now, global dynamics are shifting in unprecedented ways. The United States’ administration’s renewed push for a Most Favored Nation drug pricing policy — designed to tie domestic prices to the lowest paid in developed markets — combined with the potential removal of long-standing tariff exemptions for medicines exported from Europe, marks a historic turning point. A fundamental reordering of the pharmaceutical landscape is underway. The message is clear: innovation competitiveness is now a geopolitical priority. Europe must treat it as such. A once-in-a-generation reset The timing couldn’t be better. As we speak, Europe is rewriting the pharmaceutical legislation that will define the next 20 years of innovation. This is a rare opportunity, but only if reforms strengthen, rather than weaken, Europe’s ability to compete in life sciences. To lead globally, Europe must make choices and act decisively. A triple A framework — attract, accelerate, access — makes the priorities clear: * Attract global investment by ensuring strong intellectual property protection, predictable regulation and competitive incentives — the foundations of a world-class innovation ecosystem. * Accelerate the path from science to patients. Europe’s regulatory system must match the speed of scientific progress, ensuring that breakthroughs reach patients sooner. * Ensure equitable and timely access for all European patients. No innovation should remain inaccessible because of administrative delays or fragmented decision-making across 27 systems. These priorities reinforce each other, creating a virtuous cycle that strengthens competitiveness, improves health outcomes and drives sustainable growth. > Europe has everything required to shape the future of medicine: world-class > science, exceptional talent, a 500-million-strong market and one of the most > sophisticated pharmaceutical manufacturing bases in the world. Despite flat or declining public investment in new medicines across most member states over the past 20 years, the research-based pharmaceutical industry has stepped up, doubling its contributions to public pharmaceutical expenditure from 12 percent to 24 percent between 2018 and 2023. In effect, we have financed our own innovation. No other sector has done this at such scale. But this model is not sustainable. Pharmaceutical innovation must be treated not as a cost to contain, but as a strategic investment in Europe’s future. The choice before us Europe has everything required to shape the future of medicine: world-class science, exceptional talent, a 500-million-strong market and one of the most sophisticated pharmaceutical manufacturing bases in the world. What we need now is an ambition equal to those assets. If we choose innovation, we secure Europe’s jobs, research and competitiveness — and ensure European patients benefit first from the next generation of medical breakthroughs. A wrong call will be felt for decades. The next chapter for Europe is being written now. Let us choose the path that keeps Europe leading, competing and innovating: for our economies, our societies and, above all, our patients. Choose Europe. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The ultimate controlling entity is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The political advertisement is linked to the Critical Medicines Act. More information here.

President Donald Trump has yet to follow through on his threat to impose an additional 10 percent tariff on Canadian imports, four weeks after he halted “all trade negotiations” over an anti-tariff ad the province of Ontario ran during the Major League Baseball World Series. “Because of their serious misrepresentation of the facts, and hostile act, I am increasing the Tariff on Canada by 10% over and above what they are paying now,” Trump wrote on Truth Social on Oct. 25, after announcing two days earlier that he was terminating trade talks over the the ”egregious” ad. Trump’s announcement had Canadian exporters preparing for a worst-case scenario: a sweeping levy layered on top of existing double-digit duties, which would have been particularly painful for industries like autos, where components cross the border multiple times before reaching their final form. But to date, the Trump administration hasn’t sent any official documentation ordering U.S. Customs and Border Protection to enforce the new, higher duty, and U.S. importers have not received any new regulatory guidance. “We monitor the federal registry and follow executive order activity on a regular basis and haven’t seen any changes,” said Flavio Volpe, the president of Canada’s Automotive Parts Manufacturers’ Association, which controls over 90 percent of independent parts production in Canada. The White House did not say whether it still plans to impose the tariff when asked for comment. But a separate U.S. official suggested the Trump administration had opted to hold off on additional duties — which would have sent tariffs on Canadian goods to 45 percent — and instead continue to dangle the threat as the two sides gear up for future talks. “The Canadians know what’s on the table,” said the official, granted anonymity to discuss private conversations. Volpe said a personal intervention by Carney in Asia last month may have helped matters, too. “We understand that the prime minister spoke with the president directly about the ads, it may very well be that they settled the matter between them,” he said. Trump told reporters he had “a very nice” conversation with Carney while the two leaders were in Gyeongju, South Korea, in late October for the Asia-Pacific Economic Cooperation summit, and that Carney “apologized for what they did with the commercial.” Carney later confirmed the apology and said he had told Ontario Premier Doug Ford not to air the ad, in the first place. The spot, which the province spent about $53 million to air during the Toronto Blue Jays’ playoff run, stitched together portions of a 1987 Reagan radio address about the harms of tariffs — a move the Trump administration has seized on to argue the ad misrepresented the former president’s stance. “Canada was caught, red handed, putting up a fraudulent advertisement on Ronald Reagan’s Speech on Tariffs,” Trump complained in the Oct. 25 post. “Their Advertisement was to be taken down, IMMEDIATELY, but they let it run last night during the World Series, knowing that it was a FRAUD.” The Ontario government stopped airing the ad soon after. Speaking to Canadian business leaders in Ottawa on Wednesday, U.S. Ambassador to Canada Pete Hoekstra continued to blast the Ontario ad. “You do not come into America and start running political ads, government-funded political ads, and expect no consequences or reaction from the United States of America and the Trump administration,” Hoekstra said during remarks at the 2025 National Manufacturing Conference. Hoekstra said trade talks with Canada will restart eventually, but warned “it’s not going to be easy.” He did not mention the additional 10 percent tariff and whether it was still in the works. One Canadian official told POLITICO they have not received any documentation from the administration related to the additional tariff. The U.S. and Canada have a free trade agreement under a deal Trump negotiated during his first term. But the president still hiked tariffs on Canadian imports earlier this year, citing the country’s supposed role in the flow of fentanyl into the United States, and also hit the North American neighbor and other countries with double-digit duties on various sectors including steel, aluminum, autos and lumber. The administration, however, has exempted shipments that meet the terms of the United States-Mexico-Canada Agreement — the trade deal the president negotiated in his first term — which covers the vast majority of goods now being exported from Canada to the U.S. Carney and Trump projected optimism about the state of talks to lower those duties when the prime minister visited the White House in October. But administration officials have privately complained that Carney’s government is slow-walking the negotiations and refusing to make concessions. The White House has taken particular umbrage at Canadian efforts to secure exemptions from the U.S. steel and aluminum tariffs. Canada U.S. Trade Minister Dominic LeBlanc told reporters in Montreal last week he’s willing to go back to the negotiating table when Trump is ready, in order to get a deal that’s good for both Canadian and American workers. “We remain ready and willing to do that work, but we’re not going to wait around and look at our phones and turn up the notifications to make sure we don’t miss a ding because somebody sent us a text message at 9:30 at night,” LeBlanc said.

With multiple legislative processes underway, we are now in an important moment for Europe’s ambition to boost access and be a global leader in innovation. An agile, modernized regulatory system — coupled with supportive intellectual property and access policies — can attract research and development and advanced manufacturing to Europe. This will contribute to the earlier availability of new cures for European patients and a healthier innovative ecosystem. Unfortunately, today we see that Europe is falling behind global competition. Over the last decade, there has been a 10 percent decrease in clinical trials in the European Union, which has led to 60,000 fewer European patients participating in trials.[1] Europe’s fragmented system for clinical trial approvals is a leading cause of this decline, impacting early access to innovative treatments. As scientific breakthroughs can deliver better health outcomes for patients, governments need to keep pace with this speed of innovation. > Draghi report on EU competitiveness importantly identified pharmaceutical > innovation as a strategic sector for growth in Europe. That said, the report > also noted that what is missing is a simple and strong execution plan behind > it, with simplified regulation and coherent and predictable policies that > could drive the European goals of increased competitiveness and strategic > autonomy. Europe’s marketing authorisation process now exceeds 14 months (444 days), causing patients to wait nearly three months longer than in the US (356 days) and over five months longer than in Japan (290 days) for access to innovative medicines.[2] Such delays, combined with complex and lengthy country-level market access systems, mean patients in Europe are waiting an average of 20 months longer than people living in the United States to benefit from scientific innovation.[3] Last year’s Draghi report on EU competitiveness importantly identified pharmaceutical innovation as a strategic sector for growth in Europe. That said, the report also noted that what is missing is a simple and strong execution plan behind it, with simplified regulation and coherent and predictable policies that could drive the European goals of increased competitiveness and strategic autonomy. Ongoing discussions on the revision of the General Pharmaceutical Legislation and the In Vitro Diagnostic Regulation (IVDR), the Critical Medicines Act and the upcoming Biotech Act (Part 1) mark crucial opportunities for Europe to become a global leader for innovation. However, to make this vision a reality, the EU must address structural challenges that undermine innovation and patient access to novel, lifesaving medicines. > To reverse the worrying decline in European clinical trial activity, the EU > should implement a maximum two-month approval process for clinical trial > applications (CTAs), encompassing the reviews of both regulators and ethics > committees consistent with other global leaders. The successful implementation of structural, future-proof policy changes can ensure timely access to innovative medicines for EU citizens, and this can be achieved through five key policy recommendations: Facilitate and accelerate clinical trial applications To reverse the worrying decline in European clinical trial activity, the EU should implement a maximum two-month approval process for clinical trial applications (CTAs), encompassing the reviews of both regulators and ethics committees consistent with other global leaders. It is equally important to increase collaboration among EU member states to remove unique and specific national CTA requirements and questions, and to also introduce opportunities for an informal dialogue with regulators to expediently address smaller challenges that can be quickly fixed. Legislative overlaps and fragmentation between the Clinical Trials Regulation (CTR) and the IVDR should also be addressed to avoid delays in clinical trials that utilize companion diagnostics. Expand expedited pathways Despite their potential, the EU’s expedited pathways (such as the European Medicines Agency’s PRIME scheme for unmet medical needs, Conditional Marketing Authorisation and Accelerated Assessment) are underutilised, limiting rapid patient access to important medicines. Similar expedited pathways are widely used by other regulators around the world, like the United States and Japan. Expanding the use of expedited pathways in the EU to new indications and aligning eligibility criteria with global standards would ensure that the EU has more competitive regulatory pathways and earlier patient access to life-saving medicines. Shorten scientific advice and approval timelines Shortening the EU’s scientific advice procedure is critical to optimise the development of innovative products, ensure timely and efficient resource management for both applicants and regulators, and maintain the EU’s influence in global scientific and clinical research. By evolving to a more integrated and agile dialogue, the EU can provide comprehensive, consistent guidance throughout the product lifecycle and remain competitive with other regions. Given their growing number, scientific advice should be available for medicines used with all types of medical devices and in vitro diagnostics (including combinations diagnostics) to address the complexities of working across these regulatory frameworks. > An agile, modernized regulatory system — coupled with supportive intellectual > property and access policies — can attract research and development and > advanced manufacturing to Europe. Regarding the current lengthy approval times, the proposed reduction of EMA’s standard assessment timelines from 210 to 180 days — as suggested in the revision of the pharmaceutical legislation — would allow regulators to accelerate their scientific assessments. Furthermore, the European Commission can streamline its decision phase (currently requiring up to 67 days) by conducting its activities in parallel with the scientific assessment. Strengthen the EU Medicines Regulatory Network and embrace regulatory sandboxes Achieving greater speed and agility within a regulatory system requires an appropriately resourced, sustainable regulatory infrastructure. We support transparent regulatory budgets across the network, backed by consistent investments in expertise, funding and infrastructure to support continuous capacity and capability advancements. Collaborative regulatory pathways (such as the EMA OPEN framework) could be further expanded to encourage simultaneous approvals and supply chain resilience across geographies. Additionally, regulatory sandboxes would be beneficial to pilot and adapt frameworks for disruptive future innovations, while ensuring appropriate guardrails to enable the safe development and implementation of these innovations. Enhance patient engagement Effective regulatory decision-making requires both inclusivity and adaptability. Limited patient and expert input can hinder effective regulatory decision-making, while rapid pharmaceutical innovation requires adaptable frameworks. Expert and patient perspectives are crucial for informed benefit-risk and clinical meaningfulness determinations. Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Eli Lilly & Company * The advertisement is linked to General Pharmaceutical Legislation (GPL), In Vitro Diagnostic Regulation (IVDR), Critical Medicines Act (CMA), Biotech Act (Part 1), Clinical Trials Regulation (CTR), EU Medicines Regulatory Network More information here. -------------------------------------------------------------------------------- [1] IQVIA, Assessing the clinical trial ecosystem in Europe, Final Report, October 2024: efpia_ve_iqvia_assessing-the-clinical-trial-ct-ecosystem.pdf. [2] Lara J, Kermad A, Bujar M, McAuslane N. 2025. R&D Briefing 101: New drug approvals in six major authorities 2015-2024: Trends in an evolving regulatory landscape. Centre for Innovation in Regulatory Science. London, UK: https://cirsci.org/wp-content/uploads/dlm_uploads/2025/08/CIRS-RD-Briefing-101-v1.1.pdf. [3] The Patients W.A.I.T. Indicator 2024 Survey. https://www.efpia.eu/media/oeganukm/efpia-patients-wait-indicator-2024-final-110425.pdf

As trilogue discussions on the Critical Medicines Act (CMA) approach, its potential effects on medicine supply, patient access and Europe’s competitiveness are increasingly in focus. From an industry standpoint, several considerations are central to understanding how this act can best achieve its objectives and support a robust pharmaceutical ecosystem in Europe.  Keeping the CMA focused where it matters  Much of the debate around the CMA has centered on its promises to strengthen the availability and security of supply of critical medicines in the EU while improving accessibility to other medicines. These are goals that our industry fully supports.   The European Commission’s proposal is designed to focus on critical medicines, with a vulnerability assessment foreseen to identify which products are truly at risk of disruption and tailor solutions accordingly. Alongside critical medicines, the proposal also introduces a new definition of ‘medicinal products of common interest’. Under current wording, this would include any medicine unavailable in at least three member states, regardless of the underlying reason.   Such a broad definition risks turning a targeted framework for resilience into an all-encompassing mechanism covering almost every medicine on the market, blurring the distinction between supply and access challenges. These are fundamentally different issues that require fundamentally different policy tools.   > Applying the CMA’s tools across the entire medicines market would dilute > priorities, stretch healthcare budgets and create administrative burdens for > industry without delivering real benefits for patients.   The act will be far more effective if it remains focused on where the risks are greatest — in other words, by limiting the ‘medicinal products of common interest’ definition to cases of demonstrable market failure and directing measures toward genuinely critical medicines with a proven risk of supply disruption.  Fixing supply and access hurdles needs more than joint procurement   The CMA places joint procurement at the center of its strategy to address both supply and access challenges. While this approach can contribute to improving availability in certain circumstances, joint procurement will only deliver lasting results if it is designed to address the underlying causes of access delays and shortages, which vary across geographies and products.  For medicines where the main challenge lies in fragile supply chains, joint procurement can play a role, particularly when it enhances predictability and economic viability for suppliers. Experience from the Covid-19 pandemic has shown that coordinated purchasing can be effective in targeted situations. For medicines facing access delays, joint procurement could help improve availability in countries where genuine market failures exist. However, the value of joint procurement for countries where products are already available, or where access barriers can be better addressed by improving national pricing and reimbursement systems, is very questionable.  To ensure that joint procurement does not hinder access, several safeguards are essential. Tenders should reward quality and promote innovation, recognizing the value that innovative medicines bring to patients and society. Price confidentiality must be protected to prevent unintended spillovers, such as reference pricing effects. Once joint procurement agreements are concluded, to ensure commercial and supply predictability there should be no additional national renegotiations or expenditure control measures. Finally, allowing national procurement processes to run in parallel will be key to avoid delays and maintain flexibility.  Beyond these design safeguards, real progress will depend on tackling the broader root causes of shortages and access delays. For supply fragility, this means, among other actions, reducing strategic dependencies where necessary, improving transparency across supply chains and avoiding rigid national stockpiling rules. For access delays, progress will require addressing national pricing and reimbursement challenges, and a greater willingness from governments to reward the value that innovative medicines deliver.  Protectionism won’t make Europe stronger  Few elements of the CMA debate have attracted as much attention as the idea of prioritizing EU-made medicines. The rationale is straightforward: producing more within Europe is expected to reduce reliance on third countries, reinforce strategic autonomy and, ultimately, improve supply security. While this narrative is understandable, taking it at face value risks overlooking the realities of how medicines are manufactured and supplied today.  Europe already has one of the world’s strongest pharmaceutical manufacturing footprints and, unlike some other pharma manufacturing regions, Europe exports 71 percent of its pharmaceutical production. This output depends on global supply networks for active substances, raw materials and specialized technologies. Introducing local-content requirements or preferential treatment for EU-made products would disrupt those networks, fragment supply chains and drive up costs, with limited evidence that such measures would enhance resilience. Local-content requirements could also affect Europe’s trade relationships and weaken, rather than strengthen, its industrial base in the long term, while distorting competition within the single market and undermining the competitiveness of both European and international companies operating in Europe. The likely outcome would be less diversity and greater concentration in supply chains: the opposite of what a resilient system requires.  If procurement criteria referencing resilience or strategic autonomy are used, they should be proportionate and tied to clearly demonstrated dependencies or supply risks. Protectionist approaches, however well-intentioned, cannot substitute for the broader policy environment needed to keep Europe attractive for investment in research and development and manufacturing. A competitive European ecosystem depends first and foremost on predictable intellectual-property rules, timely regulatory processes, access to capital, and a strong scientific and technical skills base.  The EU institutions still have time to steer the CMA on course  The CMA offers a real chance to get things right. The European Parliament’s proposal for more consistent contingency stock rules could help if it stays focused on medicines genuinely at risk of shortage. The act can also make reporting more efficient by using existing systems rather than creating new ones. Policymakers should also be aware that wider regulatory initiatives directly affect Europe’s ability to manufacture and supply medicines. A more coherent policy framework will be essential to strengthen resilience.  Europe’s goal must be to build an environment where pharmaceutical innovation and production can thrive. Europe’s choice is clear: supply security cannot be achieved by weakening the industry that ensures it. The CMA will only work if it tackles the right problems with the right tools and keeps competitiveness at its core.   > Europe’s goal must be to build an environment where pharmaceutical innovation > and production can thrive. Our industry remains ready to engage with EU and national policymakers to make that happen. A high-level forum on the CMA involving all stakeholders could help guide the act’s implementation in a way that improves supply security and speeds up access for patients, while reinforcing Europe’s position as a global player in life sciences.  Disclaimer POLITICAL ADVERTISEMENT * The sponsor is European Federation of Pharmaceutical Industries and Associations (EFPIA) * The political advertisement is linked to the Critical Medicines Act More information here.

As trilogue negotiations on the End-of-Life Vehicles Regulation (ELVR) reach their decisive phase, Europe stands at a crossroads, not just for the future of sustainable mobility, but also for the future of its industrial base and competitiveness. The debate over whether recycled plastic content in new vehicles should be 15, 20 or 25 percent is crucial as a key driver for circularity investment in Europe’s plastics and automotive value chains for the next decade and beyond. The ELVR is more than a recycled content target. It is also an important test of whether and how Europe can align its circularity and competitiveness ambitions. Circularity and competitiveness should be complementary  Europe’s plastics industry is at a cliff edge. High energy and feedstock costs, complex regulation and investment flight are eroding production capacity in Europe at an alarming rate. Industrial assets are closing and relocating. Policymakers must recognize the strategic importance of European plastics manufacturing. Plastics are and will remain an essential material that underpins key European industries, including automotive, construction, healthcare, renewables and defense. Without a competitive domestic sector, Europe’s net-zero pathway becomes slower, costlier and more import-dependent. Without urgent action to safeguard plastics manufacturing in Europe, we will continue to undermine our industrial resilience, strategic autonomy and green transition through deindustrialization. The ELVR can help turn the tide and become a cornerstone of the EU’s circular economy and a driver of industrial competitiveness. It can become a flagship regulation containing ambitious recycled content targets that can accelerate reindustrialization in line with the objectives of the Green Industrial Deal. > Policymakers must recognize the strategic importance of > European plastics manufacturing. Without a competitive domestic sector, > Europe’s net-zero pathway becomes slower, costlier and more import-dependent. Enabling circular technologies  The automotive sector recognizes that its ability to decarbonize depends on access to innovative, circular materials made in Europe. The European Commission’s original proposal to drive this increased circularity to 25 percent recycled plastic content in new vehicles within six years, with a quarter of that coming from end-of-life vehicles, is ambitious but achievable with the available technologies and right incentives. To meet these targets, Europe must recognize the essential role of chemical recycling. Mechanical recycling alone cannot deliver the quality, scale and performance required for automotive applications. Without chemical recycling, the EU risks setting targets that look good on paper but fail in practice. However, to scale up chemical recycling we must unlock billions in investment and integrate circular feedstocks into complex value chains. This requires legal clarity, and the explicit recognition that chemical recycling, alongside mechanical and bio-based routes, are eligible pathways to meet recycled content targets. These are not technical details; they will determine whether Europe builds a competitive and scalable circular plastics industry or increasingly depends on imported materials. A broader competitiveness and circularity framework is essential  While a well-designed ELVR is crucial, it cannot succeed in isolation. Europe also needs a wider industrial policy framework that restores the competitiveness of our plastics value chain and creates the conditions for increased investment in circular technologies, and recycling and sorting infrastructure. We need to tackle Europe’s high energy and feedstock costs, which are eroding our competitiveness. The EU must add polymers to the EU Emissions Trading System compensation list and reinvest revenues in circular infrastructure to reduce energy intensity and boost recycling. Europe’s recyclers and manufacturers are competing with materials produced under weaker environmental and social standards abroad. Harmonized customs controls and mandatory third-party certification for imports are essential to prevent carbon leakage and ensure a level playing field with imports, preventing unfair competition. > To accelerate circular plastics production Europe needs a true single market > for circular materials. That means removing internal market barriers, streamlining approvals for new technologies such as chemical recycling, and providing predictable incentives that reward investment in recycled and circular feedstocks. Today, fragmented national rules add unnecessary cost, complexity and delay, especially for the small and medium-sized enterprises that form the backbone of Europe’s recycling network. These issues must be addressed. Establishing a Chemicals and Plastics Trade Observatory to monitor trade flows in real time is essential. This will help ensure a level playing field, enabling EU industry and officials to respond promptly with trade defense measures when necessary. We need policies that enable transformation rather than outsource it, and these must be implemented as a matter of urgency if we are to scale up recycling and circular innovations and investments.  A defining moment for Europe’s competitiveness and circular economy > Circularity and competitiveness should not be in conflict; together, they will > allow us to keep plastics manufacturing in Europe, and safeguard the jobs, > know-how, innovation hubs and materials essential for the EU’s climate > neutrality transition and strategic autonomy. The ELVR is not just another piece of environmental legislation. It is a test of Europe’s ability to turn its green vision into industrial reality. It means that the trilogue negotiators now face a defining choice: design a regulation that simply manages waste or one that unleashes Europe’s industrial renewal. These decisions will shape Europe’s place in the global economy and can provide a positive template for reconciling our climate and competitiveness ambitions. These decisions will echo far beyond the automotive sector. Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Plastics Europe AISBL * The advertisement is linked to policy advocacy on the EU End-of-Life Vehicles Regulation (ELVR), circular plastics, chemical recycling, and industrial competitiveness in Europe. More information here.

Businesses from Wall Street to main street are struggling to comply with President Donald Trump’s byzantine tariff regime, driving up costs and counteracting, for some, the benefits of the corporate tax cuts Republicans passed earlier this year. Trump has ripped up the U.S. tariff code over the past year, replacing a decades-old system that imposed the same tariffs on imports from all but a few countries with a vastly more complicated system of many different tariff rates depending on the origin of imported goods. To give an example, an industrial product that faced a mostly uniform 5 percent tariff rate in the past could now be taxed at 15 percent if it comes from the EU or Japan, 20 percent from Norway and many African countries, 24 to 25 percent from countries in Southeast Asia and upwards of 50 percent from India, Brazil or China. “This has been an exhausting year, I’d say, for most CEOs in the country,” said Gary Shapiro, CEO and vice chair of the Consumer Technology Association, an industry group whose 1,300 member companies include major brands like Amazon, Walmart and AMD, as well as many small businesses and startups. “The level of executive time that’s been put in this has been enormous. So instead of focusing on innovation, they’re focusing on how they deal with the tariffs.” Upping the pressure, the Justice Department has announced that it intends to make the prosecution of customs fraud one of its top priorities. The proliferation of trade regulations and threat of intensified enforcement has driven many companies to beef up their staff and spend what could add up to tens of millions of dollars to ensure they are not running afoul of Trump’s requirements. The time and expense involved, combined with the tens of billions of dollars in higher tariffs that companies are paying each month to import goods, amount to a massive burden that is weighing down industries traditionally reliant on imported products. And it’s denting, for some, the impact of the hundreds of billions of dollars of tax cuts that companies will receive over the next decade via the One Big Beautiful Bill Act championed by the White House. “Every CEO survey says this is their biggest issue,” said Shapiro. A recent survey by KPMG, a professional services firm, found 89 percent of CEOs said they expect tariffs to significantly impact their business’ performance and operations over the next three years, with 86 percent saying they expect to respond by increasing prices for their goods and services as needed. Maytee Pereira, managing director for customs and international trade at PriceWaterhouseCoopers, another professional services firm, has seen a similar trend. “Many of our clients have been spending easily 30 to 60 percent of their time having tariff conversations across the organization,” Pereira said. That’s forced CEOs to get involved in import-sourcing decisions to an unprecedented degree and intensified competition for personnel trained in customs matters. “There’s a real dearth of trade professionals,” Pereira said. “There isn’t a day that I don’t speak to a client who has lost people from their trade teams, because there is this renewed need for individuals with those resources, with those skill sets.” But the impact goes far beyond a strain on personnel into reducing the amount of money that companies are willing to spend on purchasing new capital equipment or making other investments to boost their long-term growth. “People are saying they can’t put money into R&D,” said one industry official, who was granted anonymity because of the risk of antagonizing the Trump administration. “They can’t put money into siting new factories in the United States. They don’t have the certainty they need to make decisions.” A White House spokesperson did not respond to a request for comment. However, the administration has previously defended tariffs as key to boosting domestic manufacturing, along with their overall economic agenda of tax cuts and reduced regulation. They’ve also touted commitments from companies and other countries for massive new investments in the U.S. in order to avoid tariffs, although they’ve acknowledged it will take time for the benefits to reach workers and consumers. “Look, I would have loved to be able to snap my fingers, have these facilities going. It takes time,” Treasury Secretary Scott Bessent said in an interview this week on Fox News. “I think 2026 is going to be a blockbuster year.” For some companies, however, any benefit they’ve received from Trump’s push to lower taxes and reduce regulations has been substantially eroded by the new burden of complying with his complicated tariff system, said a second industry official, who was also granted anonymity for the same reason. “It is incredibly complex,” that second industry official said. “And it keeps changing, too.” Matthew Aleshire, director of the Milken Institute’s Geo-Economics Initiative, said he did not know of any studies yet that estimate the overall cost, both in time and money, for American businesses to comply with Trump’s new trade regulations. But it appears substantial. “I think for some firms and investors, it may be on par with the challenges experienced in the early days of Covid. For others, maybe a little less so. And for others, it may be even more complex. But it’s absolutely eating up or taking a lot of time and bandwidth,” Aleshire said. The nonpartisan think tank’s new report, “Unintended Consequences: Trade and Supply Chain Leaders Respond to Recent Turmoil,” is the first in a new series exploring how companies are navigating the evolving trade landscape, he said. One of the main findings is that it has become very difficult for companies to make decisions, “given the high degree of uncertainty” around tariff policy, Aleshire said. Trump’s “reciprocal” tariffs — imposed on most countries under a 1977 emergency powers act that is now being challenged in court — start at a baseline level of 10 percent that applies to roughly 100 trading partners. He’s set higher rates, ranging from 15 to 41 percent, on nearly 100 others, including the 27-member European Union. Those duties stack on top of the longstanding U.S. “most-favored nation” tariffs. Two notable exceptions are the EU and Japan, which received special treatment in their deals with Trump. Companies also could get hit with a 40 percent penalty tariff if the Trump administration determines an item from a high-tariffed country has been illegally shipped through a third country — or assembled there — to obtain a lower tariff rate. However, businesses are still waiting for more details on how that so-called transshipment provision, which the Trump administration outlined in a summer executive order, will work. The president also has hit China, Canada and Mexico with a separate set of tariffs under the 1977 emergency law to pressure those countries to do more to stop shipments of fentanyl and precursor chemicals from entering the United States. Imports from Canada and Mexico are exempt from the fentanyl duties, however, if they comply with the terms of the U.S.-Mexico-Canada Agreement, a trade pact Trump brokered in his first term. That has spared most goods the U.S. imports from its North American neighbors, but also has forced many more companies to spend time filling out paperwork to document their compliance. Trump’s increasingly baroque tariff regime also includes the “national security” duties he has imposed on steel, aluminum, autos, auto parts, copper, lumber, furniture and heavy trucks under a separate trade law. But the administration has provided a partial exemption for the 25 percent tariffs he has imposed on autos and auto parts, and has struck deals with the EU, Japan and South Korea reducing the tariff on their autos to 15 percent. In contrast, Trump has taken a hard line against exemptions from his 50 percent tariffs on steel and aluminum, and recently expanded the duties to cover more than 400 “derivative” products, such as chemicals, plastics and furniture, that contain some amount of steel and aluminum or are shipped in steel and aluminum containers. And the administration is not stopping there, putting out a request in September for further items it can add to the steel and aluminum tariffs. “This is requiring companies that do not even produce steel and aluminum products to keep track of and report what might be in the products that they’re importing, and it’s just gotten incredibly complicated,” one of the industry officials granted anonymity said. That’s because companies need to precisely document the amount of steel or aluminum used in a product to qualify for a tariff rate below 50 percent. “Any wrong step, like any incorrect information, or even delay in providing the information, risks the 50 percent tariff value on the entire product, not just on the metal. So the consequence is really high if you don’t get it right,” the industry official said. The administration has also signaled plans to similarly expand tariffs for other products, such as copper. And the still unknown outcomes of ongoing trade investigations that could lead to additional tariffs on pharmaceuticals, semiconductors, critical minerals, commercial aircraft, polysilicon, unmanned aircraft systems, wind turbines, medical products and robotics and industrial machinery continue to make it difficult for many companies to plan for the future. Small business owners say they feel particularly overwhelmed trying to keep up with all the various tariff rules and rates. “We are no longer investing into product innovation, we’re not investing into new hires, we’re not investing into growth. We’re just spending our money trying to stay afloat through this,” said Cassie Abel, founder and CEO of Wild Rye, an Idaho company which sells outdoor clothing for women, during a virtual press conference with a coalition of other small business owners critical of the tariffs. Company employees have also “spent hundreds and hundreds and hundreds of hours counter-sourcing product, pausing production, restarting production, rushing production, running price analysis, cost analysis, shipping analysis,” Abel said. “I spent zero minutes on tariffs before this administration.” In one sign of the duress small businesses are facing, they have led the charge in the Supreme Court case challenging Trump’s use of the 1977 International Emergency Economic Powers Act to impose both the reciprocal and the fentanyl-related tariffs. Crutchfield Corp., a family-owned electronics retailer based in Charlottesville, Virginia, filed a “friend of the court” brief supporting the litigants in the case, in which the owners detailed its difficulties in coping with Trump’s erratic tariff actions. “If tariffs can be imposed, increased, decreased, suspended or altered … through the changing whim of a single person, then Crutchfield cannot plan for the short term, let alone the long run,” the company wrote in its brief, asking “the Court to quell the chaos.”

BELÉM, Brazil — Gavin Newsom can’t get out of a meeting or a talk at the international climate talks here without being swarmed by reporters and diplomats eager for a quote, a handshake, a photo. On a tour Tuesday of a cultural center with Gov. Helder Barbalho, the leader of the Brazilian state hosting the talks, a passerby recognized them both. “There’s the governor,” he exclaimed. “And there’s the California governor.” Later in the day, as Newsom rode up an escalator packed with reporters and international officials on his way to deliver a speech, a bystander shouted: “The escalator’s not broken for you!” — a dig at President Donald Trump, who once had an escalator malfunction on him at the United Nations. Newsom grinned wide: “Oh, I like that.” The adulation was gold for a governor with presidential aspirations as he steps into a power vacuum. The Trump administration is trying to dismantle climate policies both at home and abroad, and other likely Democratic presidential contenders are absent from the United Nations climate talks. Seeing a chance to plant his green flag on an international stage, Newsom is embracing the role of climate champion as his own party backs away at home and the politics of the issue shift rightward. It’s a role fitting Newsom’s instincts: anti-Trump, pro-environment and pro-technology, and with a political antenna for the upside of picking fights, finding opportunity in defiance. “We’re at peak influence because of the flatness of the surrounding terrain with the Trump administration and all the anxiety,” he told POLITICO from the sidelines of a green investor conference in Brazil on Monday. Newsom’s profile has never been higher. Just days before traveling to Brazil, he celebrated a decisive win in his redistricting campaign to boost Democrats in the midterms. He is polling at or near the top of presidential primary shortlists, and is amassing an army of small-dollar donors across the states. The governor couldn’t walk down the hallway at the conference without getting swarmed, undeniably the star of the talks on their second formal day. At one point, security officials had to physically shove away one man repeatedly. Conference attendees yelled out “Keep up the social media!” and “Go Gavin!” (and the occasional “Who is that?”). The first question by the Brazilian press: Are you running for president? And from business people: Are you coming back? Yet in touching down here — and in emphasizing his climate advocacy more broadly — Newsom is assuming a significant risk to his post-gubernatorial ambitions. The rest of the world may wish America were more like California, but the country itself — even Democrats who will decide the 2028 primary — are far more skeptical. What looks like courage abroad can read as out-of-touch back home, in a country where voters, including Democrats, routinely rank any number of issues, including the economy, health care, and cost-of-living, as more pressing than global warming. THE STAGE IS SET Other blue states were already backing away from Newsom’s gas-powered vehicle phase-out even before Congress and Trump ended it this summer, and another possible Democratic contender for president, Pennsylvania Gov. Josh Shapiro, may pull his state out of a regional emissions trading market as part of a budget deal, a move seen as tempering attacks from the right on climate. Even in California, where a new Carnegie Endowment for International Peace poll finds that Californians increasingly want their state government to play a bigger role on the international stage, trade trumped climate change as voters’ top priority for international talks for the first time this year. “There’s not a poll or a pundit that suggests that Democrats should be talking about this,” Newsom acknowledged in an interview. “I’m not naive to that either, but I think it’s the way we talk about it that’s the bigger issue, and I think all of us, including myself, need to improve on that and that’s what I aim to do.” In his 2020 presidential campaign, Joe Biden prevailed not after embracing — but rather, distancing himself from — the “Green New Deal,” which Newsom acknowledged this month had become a “pejorative” on the right. Four years later, Trump pilloried Kamala Harris in the general election for her past positions on climate change. Newsom is already facing relentless attacks from the right on energy: two years ago, in what was seen at the time as a shadow presidential debate, Florida Gov. Ron DeSantis was skewering Newsom for his phase-out of gas-powered vehicles: “He is walking his people into a big-time disaster,” DeSantis said. And that was before Republicans began combing Newsom’s social media posts for material to weaponize in future ads. Even Newsom’s predecessor, former Gov. Jerry Brown, who made climate change his signature issue, acknowledged “climate is not the big issue in South Carolina or in Maine or in Iowa.” “Climate is important,” Brown said in an interview. “But it’s not like immigration, it’s not like homelessness, it’s not like taxes, it’s not like inflation, not like the price of a house.” Still, Brown cast climate as an existential issue. “It’s way beyond presidential politics. It is about our survival and your well being for the rest of your life,” he said. “I think he’s doing it because he thinks it’s profoundly important, and certainly politics is not divorced entirely from reality.” Newsom’s inner circle senses a political upside, too. His first-ever visit to the climate talks comes not just from his own or California’s ambitions, but from the vacuum left by Trump. “The more that Trump recedes, like a tide going out, the more coral is exposed. And that’s where Newsom can really flourish,” said Jason Elliott, a former deputy chief of staff and an adviser since Newsom’s early days in elected office. Newsom is “going against the grain,” he continued. “It’s easier to be some of these purple or red state governors in other places in the United States that just wash their hands of EVs the minute that the going gets tough. But that’s just not Newsom.” On climate, Newsom’s attempts to stand alone sit well within the California tradition. Brown and Arnold Schwarzenegger — the Democrat and the Republican who preceded him — both made international climate diplomacy central to their legacies. “We have been at this for decades and decades, through Republican and Democratic administrations,” Newsom said. “That’s an important message at this time as well, because we’re so unreliable as a nation, and we’re destroying alliances and relationships.” Also in Brazil for part of the talks were Govs. Tony Evers of Wisconsin and Michelle Lujan Grisham of New Mexico, both Democrats, and mayors of several major U.S. cities, like Kate Gallego of Phoenix. But their pitch didn’t land with quite the same heft as California’s, a state filled with billion-dollar tech companies that, as Newsom frequently boasts, recently overtook Japan as the world’s fourth-largest economy. He attributed his environmental streak to his family, citing his father, William Newsom, a judge and longtime conservationist. As mayor of San Francisco, Newsom signed a first-in-the-nation composting mandate and plastic bag ban. As lieutenant governor to Brown, Newsom called himself “a solution in search of a problem” because Brown had embraced climate so prominently. But Brown said Newsom has made the issue his own. “I think Newsom comes to this naturally,” he said. Newsom pulls from a wide range of influences; prolific texting buddies include former Washington Gov. Jay Inslee, who ran for president largely on a climate platform, and former Secretary of State John Kerry. He frequently cites the example of President Ronald Reagan, the Republican — and former California governor — who embraced an environmental agenda. “I talk to everybody,” Newsom said. He spoke in almost spiritual terms about his upcoming trip deeper into the Amazon, where he’s scheduled to meet with community stewards and walk through the forest. “When we were all opening up those first books, learning geography, one of the first places we all learn about is the Amazon,” he said. “It’s so iconic, so evocative, so it informs so much of what inspires us as children to care about the Earth and Mother Nature. It connects us to our creator.” THE MID-TRANSITION HURT As governor, Newsom hasn’t had the luxury his predecessors enjoyed of setting ambitious emissions targets, but instead is working in a period beset by natural disasters and tensions with both the left and moderate wings of his party. His aides have dubbed it the remarkably un-sexy “mid-transition”: The deadlines to show results are here, they’re out of reach — and in the interim, voters are mad about energy prices. As a result, he’s pushed to ban the sale of new gas-powered cars by 2035 and directed billions toward wildfire prevention and clean-energy manufacturing — but also reversed past positions against nuclear and Big Oil, including extending the life of California’s last nuclear power plant, pausing a profit cap on refineries and expanding oil drilling in Kern County. Inside the administration, those moves are seen as not a tempering of environmental ambition but a pragmatic recalibration. “We’re transitioning to the other side, and there’s a lot of white water in that. And that’s reality. You’ve got to deal with cards that are dealt,” Newsom said in an interview in São Paulo. But it also exposes him to criticism from both the left and moderate wings of his own party. Newsom’s 2023 speech excoriating oil companies to the United Nations in New York City was one of his proudest moments of his career. This year, he faced banners attacking him: “If you can’t take on Big Oil, can you take on Trump?” At the same time, former Los Angeles Mayor Antonio Villaraigosa, a Democrat, has seized on high gas prices in his campaign to succeed Newsom as governor in 2026 — and is partly blaming past governors’ climate policies. Adding to the crunch are the record-setting wildfires that have beset Newsom’s tenure as governor. They’ve not only devastated communities from Paradise in Northern California to Altadena in Los Angeles County but buoyed both electricity prices as utilities spend billions on fire-proofing their grid and property insurance prices as insurers flee the state. It’s this duality that informs Newsom’s approach. “We’ve got to address costs or we’ll lose the debate,” Newsom said. “This is the hard part.” A business moderate known to hand out personal phones programmed with his number to tech CEOs, Newsom is now pitching his climate fight as one focused on economic competitiveness and jobs. Lauren Sanchez, the chair of the state’s powerful air and climate agency, the California Air Resources Board, called the state’s international leadership the governor’s “north star” on climate change. “He is in the business of ensuring that California is relevant in the future economy,” she said. In Brazil, Newsom made the time to stop by a global investors summit in São Paulo, where he held an hour-long roundtable with green bankers, philanthropists and energy execs. They told him they wanted his climate pacts with Brazilian governments to do more on economic ties. So, Newsom said, he started drafting a new agreement there and then, throwing a paper napkin on the table in reference to the cocktail napkin deal that formed Southwest. “Let’s get this done before I leave,” Newsom said he told his Brazilian counterparts. “We move quickly.” If the moment reflected California’s swagger, it also laid bare its limitations. The Constitution limits states from contributing money to international funds, like the tropical rainforest preservation fund that is the Brazilians’ signature proposal at the talks. And even at home, Trump is still making Newsom’s balancing act hard: Newsom floated backfilling the Trump administration’s removal of electric vehicle incentives with state rebates, then backtracked, conceding the state doesn’t have enough funds. And on Tuesday, reports came out that the Trump administration was planning to offer offshore oil and gas leases for the first time in decades off the coast of California — putting Newsom on the defensive. Newsom called those plans “dead on arrival.” “I also think it remarkable that he didn’t promote it in his backyard at Mar-a-Lago; he didn’t promote it off the coast of Florida,” Newsom added.